The registration of a microfinance institution in Cameroon constitutes a complex and highly regulated process, subject to authorization by the Ministry of Finance (MINFI) upon receipt of a favourable opinion from the Central African Banking Commission (COBAC). The process necessitates the establishment of a public limited company (SA), strict compliance with minimum capital requirements, and the submission of comprehensive documentation encompassing business plans, shareholder information, and director particulars to both COBAC and the Minister of Finance.
WHAT IS THE LEGAL STATUS OF A PUBLIC LIMITED COMPANY NOT HAVING A MICROFINANCE LICENSE IN CAMEROON?
A public limited company (PLC) incorporated in Cameroon that has not yet obtained a microfinance licence regardless of any intention to provide financial services or any name suggesting such activities operates solely as a commercial company under OHADA law. It is strictly prohibited from engaging in any banking or microfinance activities including accepting deposits, extending credit, or providing currency exchange services until it has received formal authorization from the Ministry of Finance following a favourable opinion from the Central African Banking Commission (COBAC).
KEY PLAYERS IN THE MICROFINANCE REGISTRATION PROCESS IN CAMEROON
- Centre for the Creation of Enterprises (CFCE): Prior to accessing banking and microfinance services, start-up entities are required to complete the proper registration of their businesses with the competent Cameroonian authorities. This entails obtaining a trade register number from the Commercial Court and registering with the Centre de Formalités de Création d’Entreprise (CFCE).
- Court of First Instance: In its capacity as the commercial court, it is the body responsible for establishing the company registration certificate known as the M.O Form for companies and businesses in Cameroon. This is a company certificate issued as proof of existence of the company.
- Ministry of Finance (MINFI): The Ministry receives bank registration applications and transmits them to COBAC for technical assessment. MINFI holds the power to approve microfinance licenses, acting as the national regulatory authority in collaboration with COBAC.
- Banking Commission (COBAC): COBAC conducts off-site and on-site supervision of banks and microfinance institutions (MFIs) to ensure safety and soundness.
- National Credit Council (NCC): Provides opinions on legal and regulatory activities, including bank classification, minimum capital requirements, and licensing (creation/closure) of microfinance institutions.
- Bank of Central African States (BEAC): BEAC defines and conducts monetary policy for the CEMAC region to maintain the internal and external value of the CFA franc.
- Agence Nationale d’Investigation Financiere (ANIF): Body responsible for monitoring suspicious cash flow in Cameroon. Hence all money laundering activities in Cameroon are reported to ANIF.
PRELIMINARY STEPS TO CONSIDER TO REGISTER A BANK IN CAMEROON
- Choice of Corporate Structure
- The choice of corporate structure by the promoters to register a microfinance in Cameroon must be that of a Public Limited Company with a Board of Directors in conformity with Article 4 of Regulation No. 04/08/CEMAC/UMAC/COBAC of 06 October 2008.
- Another choice of corporate structure by the promoters to register a microfinance in Cameroon must be that of a Credit Union which are legally categorized as Cooperative Societies. They operate under cooperative law (such as the OHADA Uniform Act on Cooperatives), as well as national regulations set by the Ministry of Finance and COBAC. Credit unions are democratically member-owned; each member holds shares and has a vote in electing the board of directors, regardless of the size of their savings.
- Share Capital
- The share capital to be contributed by the intending shareholders of the corporate structure to engage in the microfinance activity in Cameroon must first be that of a public limited company which is 10,000,000 Fcfa for registered companies in Cameroon in line with the OHADA Law. Then each microfinance category has its finance specificity as follows:
- Category 1 (Mutual/Community): No minimum authorized capital is required, but they must operate as a cooperative with at least 100 members.
- Category 2 (Standard MFI): Minimum share capital of 300 million FCFA.
- Category 3 (Specialized/Direct Microcredit): Minimum share capital of 150 million FCFA.
- N/B: Category 2 and 3 Microfinance institutions must take the legal form of a Public Limited Company (Société Anonyme or SA) under Cameroon law.
- Choice of Management Structure
- The management structure of the corporate entity to operate the business of a microfinance in Cameroon must be a board of directors which must have the accredited personnel as required by Article 4 of Regulation No. 04/08/CEMAC/UMAC/COBAC of 06 October 2008
- Competence of Directors/GM/DGM: Generally, a minimum of 5 to 10 years of professional experience in banking, finance, auditing, or similar sectors is required. A post-graduate degree (typically Bac+4 or Bac+5) in Economics, Finance, Management, Law, or a related field.
- Operating Capital
- Category 1 (Mutual/Community): No minimum authorized capital is required, but they must operate as a cooperative with at least 100 members.
- Category 2 (Standard MFI): Minimum share capital of 300 million FCFA.
- Category 3 (Specialized/Direct Microcredit): Minimum share capital of 150 million FCFA.
- Types of Authorized Shareholders
- Individual Shareholder: A physical person who has to give a Letter of commitment addressed to the President of COBAC.
- Private Corporate Shareholder: A company registered under private law.
- Public Corporate Shareholder: A company registered under public law.
- Types of Authorized Auditors
- Individual Auditor: A physical person who is a qualified accountant, has an approval issued by CEMAC as a chartered accountant and also has a certificate of registration with the National Order of Chartered Accountants where applicable.
- Corporate Auditor: A legal person under company law registered an an accounting firm with an approval under CEMAC and a certificate of registration with the National Order of Chartered Accountants where applicable.
REGISTRATION PROCESS OF A MICROFINANCE IN CAMEROON
Step 1: Corporate Structure Requirement
Form of Company: A Public Limited company with a Board of Directors for Category 2 and 3 Microfinance institution or a Credit Union with the mandatory committees for a Category 1 microfinance institution.
Capital Requirement: Share capital for a Public Limited Company is minimum 10,000,000 Fcfa and the share capital required for the microfinance license approval is 150,000,000 Fcfa for Category 3, 300,000,000 Fcfa for Category 2 and no specified amount from the 100 subscribed members in Category 1.
Management Set Up Requirement: Directors, General Manager, Deputy General Manager, Auditor and Alternate Auditor. Auditors must have CEMAC approval and be registered under the National Order of Chartered Accountants whilst the executive members for management are to have between 5 to 10 years of work experience.
Audit Set Up Requirement: An auditor and Alternate with CEMAC approval and registered in the National Order of Chartered Accountants.
Location: A physical location plan and certificate of localization are needed.
Step 2: License Procurement/ Approval to Operate a Microfinance in Cameroon
Phase 1: Obtain Preliminary Approval (Agrément Préalable)
You must first apply for authorization from the National Credit Council (CNC) and COBAC. Your application must include:
A viable business plan and draft statutes (articles of association).
Proof of share capital deposited in a corporate bank account.
Proof of professional competence and honourability for proposed managers (e.g., CVs, clean criminal records).
Financial statements (if shareholders are corporate entities).
Phase 2: Register Your Business Entity
Once preliminary approval is secured, you must formally register your business at a Business Creation Formalities Centre (CFCE). Requirements include:
Notarized articles of incorporation.
A reserved unique company name.
A Taxpayer's Card and Tax Identification Number (NIU).
Proof of your capital deposit.
Phase 3: Obtain Final Authorization (Agrément Définitif)
Upon the formal constitution of the business and its registration with the Trade Registry (RCCM), the final documentation comprising the company registration documents, tax documentation, and evidence of paid-up capital must be submitted to MINFI and COBAC for review. Upon successful review, an official operating licence will be issued to the applicant.